Sorrell goes hostile in TNS battle

Sir Martin Sorrell went hostile today in the £1 billion takeover battle for market research group Taylor Nelson Sofres (TNS) which has been chasing a friendly merger with its German rival GfK.

Sorrell has become exasperated by the refusal of TNS board to start negotiations with WPP, and accused it of supplying less financial information than it had given to the Germans.

The Takeover Panel forced WPP to issue a "put up or shut up" statement today after it made several bid proposals but no firm offer for TNS.

But in a further twist GfK is lining up a private-equity partner so it can launch its own bid for TNS.

This would see it replace the current agreed "merger of equals" deal which sees no premium being paid for TNS with a cash and shares mixture to rival the WPP offer.

Sorrell appealed directly to TNS shareholders today, saying he had "reluctantly" dropped the bid condition that he wanted the backing of the market research group's board.

"Despite repeated efforts over more than three months to engage with TNS management, we have been unable to enter into any discussions that could lead to an agreement," he said, adding that the offer would generate value for WPP shareholders while offering TNS shareholders cash certainty and equity upside.

WPP is offering 173p cash and 0.1889 of its own shares for every TNS share, which values them at 260.6p each. That is a 5% premium to last night's closing price of 348p, but a 21% premium to the price on WPP's first approach in early May.

Sorrell added: "Although our offer may be characterised by some as a 'hostile bid', we believe that it is in no way hostile. It is not hostile to TNS shareholders, nor to its employees and not to its clients, many of whom, seem happy to see us around. It may, of course, be hostile to a couple of people like the chairman and chief executive of TNS."

He also welcomed GfK's likely switch to a full bid for TNS, saying: "They talked a good game, now it's time to see if they can deliver."

GfK's financial partner has not yet been revealed, but the Germans feel they could still beat Sorrell if they bid 260p entirely in cash as opposed to WPP's cash and shares mix.